Globalworth Real Estate Investments : Interim Report and Unaudited Interim Condensed Consolidated Financial Statements 30 June 2020

GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED

INTERIM REPORT AND UNAUDITED INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

30 JUNE 2020

CONTENTS

FINANCIAL HIGHLIGHTS: H1-20	2
CHIEF EXECUTIVE'S STATEMENT	3
MANAGEMENT REVIEW	6
FINANCIAL REVIEW	20
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	29
STANDING PORTFOLIO - BREAKDOWN BY LOCATION TYPE (30 JUNE 2020)	73
GLOSSARY	75
COMPANY DIRECTORY	78

Interim Report and Unaudited Interim Condensed Consolidated Financial Statements 30 June 2020

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FINANCIAL HIGHLIGHTS: H1-20

Combined portfolio open	Shareholders' equity	EPRA NAV per share
market value

	€3.0bn		€1.8bn		€8.80
	-1.1% on YE-19			-6.0% on YE-19			-5.4% on YE-19
IFRS Earnings before tax	Adjusted normalised EBITDA	Net Operating Income
-€46.1m		€71.5m		€79.6m
+€88.0m in H1-19	+16.1% on H1-19	+17.1% on H1-19
IFRS Earnings per share	EPRA Earnings per share	Dividends paid in H1-20
-22 cents		21 cents		30 cents
+44 cents in H1-19	-8.7% on H1-19	+11.1% on H1-19

Interim Report and Unaudited Interim Condensed Consolidated Financial Statements 30 June 2020

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CHIEF EXECUTIVE'S REVIEW

2020 has been a year of significant challenges, with a first quarter full of optimism and strong performance coming to an abrupt halt due to the Covid-19 pandemic in March which has carried on ever since. The rapid spread of the Covid-19 pandemic has created significant uncertainty regarding the future, and the way we live and operate. For us, the safety and wellbeing of our people, partners, communities, and other stakeholders, is and will continue to be our top priority, as we focus on safeguarding our business, protecting our assets and minimising our exposure to the impact of Covid-19.

I, and the entire Globalworth team, are committed to fight and overcome this crisis, following regulations and recommendations issued by the World Health Organisation as well as national, regional and local governments and adapting our operations accordingly.

To this end, since the very early days of the pandemic we took several measures in Poland and Romania, aiming at ensuring not only the maximum possible protection for all parties concerned, but also business continuity and long-term viability. I am pleased to report that our proactive approach, and in certain cases assertive measures, have been in the right direction.

Country update

There has been an increase in confirmed cases of Covid-19 during the pandemic, especially over the summer period, with more than

20.5 million and 3.1 million cases globally and in Europe respectively as at 27 August 2020. Poland and Romania rank 13th and 9th in Europe with 64.7k (2.0kdeaths) and 83.2k (3.5k deaths) in terms of confirmed cases, respectively.

Since March the authorities in both countries, in line with many other countries, declared a "state of emergency" for part of this period, and adopted several measures in order to address the pandemic, including restrictions on peoples' movement, travelling, opening hours of commercial spaces and so on. They also imposed emergency measures to protect affected businesses. Such measures included rent reductions and/or suspensions for non-essential retail businesses for as long as the state of emergency applies. In both countries, non-essential retail premises were ordered to close whereas certain types of restaurants were only allowed to operate a take-away or delivery service. There has been no government measure in either country forcing the closure of office, industrial premises or essential retail businesses (supermarkets, pharmacies, convenience stores etc.).

Although currently most of the above restrictions were lifted since June/early July, should the spike in confirmed cases over the summer period continue, we cannot preclude some of these restrictive measures being re-introduced.

Our Active Approach During the Pandemic

The Covid-19 pandemic has caused us to rethink our overall strategy, while looking to our long-term activities and investments.

During the period, in order to ensure the health and safety of the people who work at or visit our properties, and to maintain business continuity for our tenants and ourselves, we implemented several preventative measures such as performing frequent disinfections with specialised products in areas of high traffic, installed hand disinfection stations in common areas of the properties, maintained a continuous open communication with our tenants and suppliers on matters related to Covid-19 and established a detailed action plan in place should a Covid-19 case be detected in one of our buildings.

In addition, we reviewed all our suppliers and supplier contracts, resulting in the termination and/or suspension or renegotiation of several agreements, aiming at achieving significant savings which will benefit mainly our tenants. As most of our leases are triple net, the cost savings which form part of the service charges paid by tenants will be lower thus reducing their overall occupational cost in our properties. The approach we have taken as a result during this period is to reduce the service charge cost based on the projected amounts in the interim period, reducing the burden of our tenants, until we perform the final 2020 service charge reconciliation early next year.

In terms of investments, we have utilised a risk-adjusted approach aiming at preserving as much cash in the business without jeopardising safety and future growth of the Group. We substantially reduced our renovation & upgrade capex for our standing properties, focusing on the absolute essential requirements relating to health and safety, and maintenance. Furthermore, we continued focusing our investment capex on development projects with either significant pre-lets or for which construction was substantially completed or was very advanced at the time the pandemic started, while we suspended all other developments or new acquisitions. We continue to closely monitor the market and should an investment opportunity with particularly attractive potential returns arise in the future we have ample liquidity to pursue it.

Despite the challenging economic environment, we have remained committed in supporting our communities of which we are an integral part, and have directed a substantial amount of our ESG funds for this year in assisting hospitals and related staff in Romania and Poland by donating more than €650k in the fight against Covid-19.

Interim Report and Unaudited Interim Condensed Consolidated Financial Statements 30 June 2020

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